ELO Media Helps Independent Video Stores Prolong Their Business

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June 21, 2006, Two new companies, Fast Flick DVD Rentals and Valley Home Video, have recently adopted ELO Media’s DVmatic machines to enter the automated DVD kiosk market.

Valley Home Video, a California based business established in 1981, one of the oldest independent video rental store around - now turned automated. In an attempt to streamline its business and reduce costs, Valley Home Video has closed its store and installed one of ELO’s automated kiosks in its grocery store – Valley Food Super Center. “We used to have our video and grocery stores right next to each other, but when we moved the grocery store, we lost most of the foot traffic which impacted our video rental business significantly. Once we realized that it would be wise to combine the two, switching to an automated kiosk was a simple decision to make” says Gary Yep, partner of Valley Home Video and Valley Food Super Center. Yep also says “Although we don’t have the depth of titles as we would at the store, we have the ability to fit 550 movies in one kiosk, which still gives my customers a nice mix of new and old titles to choose from. In addition, we now offer online reservations that provide our customers with the ultimate convenience.” Yep believes that he can capitalize on the already established brand name Valley Home Video has in the local community. He charges $1.00 per day and looks to build the business quickly as he watches his customers get comfortable with using the machine.

FastFlick DVD Rentals, based in Tucson AZ, has placed the kiosk inside its convenience store at FastLane Chevron gas station. “We are thrilled to be the first Tucson business to install a fully automated DVD kiosk and to provide our customers with this convenient entertainment option.” Said Lee Jestings, one of the owner’s of the FastLane Chevron. “Fast, convenient, inexpensive and easy, FastFlick DVD fits our customers busy lifestyles.” According to Lee, The FastFlick DVD kiosk is the first of many that will be installed at convenient locations throughout Tucson. “We are currently assessing both the revenue potential of the kiosk and the impact on store traffic” says Jestings and adds “I particularly like the fact that every customer has to return the movie at my store, thus increasing the chances of them purchasing another item or filling up on gas. We are looking forward to seeing the impact on store sales attributed to the kiosk.”

Oren Hon, CEO of ELO Media, which provides the kiosks and the software to run them, says “The machines are slowly replacing the mom-and-pop video stores and will eventually have an impact on chains such as Blockbuster Video (NYSE: BBI). Offering lower operating costs, ease and convenience of use and occupying only a minimal footprint, they provide the ultimate solution for DVD rental distribution.” When asked about Netflix (NASDAQ: NFLX) and Video-on-demand, Hon says “Netfilx provides a great service, but their clients are different. Kiosks serve a more spontaneous audience who wish to watch a specific movie at a specific time. Most renters don’t want to wait 3 days for their movies and hope to get the ones that are at the top of their list. Furthermore, our kiosks have a similar subscription service to Netflix and Blockbuster for those avid renters who rent frequently. Placed at grocery stores and convenience stores, you are no longer forcing the renters to make a special trip to the video stores, thus making the rental experience even more convenient. As for VOD, there is still a long time before it gains substantial usage, and DVDs are here to stay for at least another 5-10 years”

The kiosk rental business has grown substantially in the past 12 months, with Redbox leading the market with over 1,000 machines deployed. Movie Gallery (NASDAQ: MOVI) and Hollywood are following suit and testing their own machines at some locations. It seems to be only a matter of time before we see this type of automated DVD rental kiosk at every corner.

For additional information on the companies, please visit their websites.

ELO Media: http://www.elomedia.com
Valley Home Video: http://www.valleyhomevideo.com
FastFlick DVD Rentals: http://fastflick.dvmatic.com/

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